5Keys to Getting a commercial Loan
1. Know what you want or need the funds for. You need to have a specific purpose for borrowing the funds, and what you plan to make happen with them. Banks and lenders need to see how the funds will improve your business, and impact your overall profitability.
2. Make sure you have all of your business and personal financial information updated and available. This includes tax returns being filed on a timely basis, current month-to date and year-to-date business financials, as well as year-end financials at the ready for your loan request. Most lenders request three years’ worth of financials and taxes from you for the initial loan submission.
3. Tell your banker/lender EVERYTHING! Most borrowers are embarrassed to share problem areas or issues within their credit or business history which may become a challenge to getting the loan. Always disclose those issues up front. Nothing kills a loan faster than a glaring issue which was undisclosed that crops up just prior to closing. Lenders run a background check and credit update just prior to closing, so these items will be revealed. It is better to share things like prior bankruptcies, tax liens, collections, pending lawsuits, etc. with your lender up-front. It will save them and you time and frustration in the loan process, and get you to the right lender for your loan scenario early on.
4. Respond to information requests/questions promptly. The lender cannot proceed on your loan request when they have data missing, or have unanswered questions that affect their loan report. Without sending back critical information promptly, the underwriter will put your file aside, and work on another loan request until they get what they have asked for from you. This will delay your loan process, and delay your eventual loan closing. Your prompt response assures that the process remains moving.
5. Be cooperative and patient. Keep in mind that most lenders are working on multiple loan files at the same time. Your loan is in an underwriting queue, and will be worked on at the pace that they receive your requested information. Don’t expect that if you send in the required items today that you’ll have a loan approval tomorrow. The underwriter needs to complete the loan underwriting process and get their approvals completed to get back to you with their decision. Also, calling more frequently does not speed up the process. Most lenders will keep you informed as to their timeline for completion.
Hopefully, these tips will help you get your next commercial loan more easily. Please feel to contact us at www.bellwetherfunding.com and reach out to us with any questions we may assist you with.
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